Government & Economics

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Let’s take a moment to review a few concepts about government spending, as well as some basic economics:

The government does not have money sitting in a pool that it can dole out at will.

The government does not sell goods or services like a business. It does not make a profit. Therefore, there is no excess fund that the government can draw on to spend money on whatever you think it should provide.

Aside from selling bonds that it must repay later anyhow, the government’s chief source of revenue is taxes. That is to say– The money that the government uses in order to pay out retirement income, subsidize education, cover health care — to supply any form of welfare — is money that has been taken from the paychecks of you and your fellow taxpayers.

In order for the government to pay for universal health care, it must raise taxes.  In order for the government to increase grants for students, it must raise taxes.  In order for the government to continue to pay out Social Security as the number of retirees outpaces the number of workers contributing to the system, it must raise taxes. 

I hope I’m making this point crystal clear. The more you want your government to pay for, the more of your income that you’ll have to surrender… and the more our economy will look like a socialist European system.

What’s worse, the more your government subsidizes costs, the higher your costs will become. Why? Because the less people use their own money to pay for something, the less they’ll shop around, and the less competition will exist; thus, the higher prices will become.

Or, even more fundamental– When any given business sees that the government is willing to cover x dollars of your cost, the next logical thing for the business to do is to raise the price of its service by x dollars. Businesses know that consumers are already willing to pay a particular amount for a particular product. So, shortly after the government chips in to “help” you, your costs will be raised because the business knows that it can get more money from the both of you combined.  (That’s one of many reasons why the cost of college is as high as it is today. And this is the primary reason why those of you who think the situation is going to get better by increasing government grants are dead wrong.)

The government really has no business in economic matters beyond paying for national defense, police, firemen, maintaining roads & bridges… just the bare essentials to keep our country running. It certainly has no business providing anything for which individual citizens are responsible. Such government meddling only makes the situation worse for everyone.